Current through Register Vol. 54, No. 52, December 28, 2024
(a) Custodial
Funds must be deposited in a Custodial Account.
(b) Qualified Funds are Custodial Funds that,
in the Good Faith judgment of the Judicial Official, are nominal in amount or
are reasonably expected to be held for such a short period of time that
sufficient income will not be generated to justify the expense of earning
income to benefit the Beneficial Owner of the funds. With few exceptions,
Custodial Funds handled by Judicial Officials will be Qualified
Funds.
(c) The Judicial Official,
in the exercise of Good Faith judgment, should apply an economic benefits test
to determine whether particular Custodial Funds are not Qualified Funds and
hence the Beneficial Owner of the funds should receive the income on those
funds.
(1) If the anticipated cost of
administering a segregated account for the benefit of the Beneficial Owner of
the funds is more than the income expected to be generated on the funds, then
the funds are Qualified Funds.
(2)
Custodial Funds that when considered alone are not large enough to earn income
for the Beneficial Owner thereof are Qualified Funds.
(3) Funds which are not expected to be held
for a sufficient time to provide income for the Beneficial Owner are Qualified
Funds.
(d) Factors which
should be used to determine whether Custodial Funds are Qualified Funds
include:
(1) The cost of establishing and
maintaining separate account(s) benefiting Beneficial Owners;
(2) The account and bank service charges of
the Depository Institution in which the account is maintained;
(3) The minimum deposit requirements of the
Depository Institution in which the account is maintained;
(4) accounting fees incurred in connection
with the funds;
(5) tax reporting
requirement costs incurred in connection with the funds; and
(6) The length of time the funds are expected
to be on deposit and the rate of interest or dividend that will be earned on
the funds.
(e) Examples
of Qualified Funds include:
(1) funds
collected which represent fines and costs that are awaiting payment to the
appropriate governmental entity;
(2) funds collected which represent posting
of collateral by individuals who plead not guilty to a charged offense, unless
those funds are of such a magnitude that the costs of administering a separate
account for those funds, including service charges and other charges, will be
less than the income anticipated to be earned;
(3) funds collected which represent posting
of bail by or on behalf of an individual awaiting a hearing, unless those funds
are of such a magnitude that the costs of administering a separate account for
those funds, including service charges and other charges, will be less than the
income anticipated to be earned;
(4) funds collected which represent
restitution to victims pending the payment of the funds to the victims;
and
(5) funds collected which
represent payment of filing fees and other costs pending payment to the
appropriate persons or entities.
